If new equipment purchased in Year 1 is reported on the balance sheet at December 31,Year 1 as a long-term asset,there will be no related item on the Year 1 income statement.

Question

Quizplus · Accepted Answer

The purchase of new equipment will not directly appear on the income statement, but depreciation expense related to the equipment for Year 1 will be reported on the income statement, affecting the company's net income.

If New Equipment Purchased in Year 1 Is Reported on the Balance